Economic Survey 2011: India must invest to boost farm yield, growth.
NEW DELHI: India needs to step up investment to boost crop yield and farm infrastructure as the country aims for 8.5 percent agriculture growth in the financial year from April, a finance ministry report said on Friday.
The government allocated around 778.8 billion rupees ($17.1 billion) for the farm and allied sectors in the current financial year to March 2011, about 7 percent of the total budget.
The report, presented in parliament ahead of Monday's general budget, said the farm sector grew at 2.87 percent in the first four years of the current five-year plan from 2007.
"In order to achieve the plan target of average 4 percent per year, the agriculture sector needs to grow at 8.5 percent during 2011/12," said the report, tabled by Finance Minister Pranab Mukherjee . The farm sector is likely to grow at 5.4 percent in 2010/11.
"It is impossible for farm and allied activities to register such a high growth rate. It doesn't appear to be a realistic growth target set for the farm sector," said Bibek Debroy of the Centre for Policy Research , a policy think tank.
The report added fruits and vegetables, sectors which have seen spiralling prices this year, needed to boost output. "Further, special attention is required for achieving higher production and productivity levels in pulses, oilseeds, fruits and vegetables, which had remained untouched in the first Green Revolution but are essential for nutritional security," it said.
SECOND GREEN REVOLUTION?
The technological breakthrough achieved during the green revolution of the 1960s is on the wane, it said. "The need for a second green revolution is being experienced more than ever before," the survey said.
It said productivity has plateaued in rice and wheat. Despite overflowing grain bins, the government needs to boost rice and wheat productivity to feed a growing population and to meet any sudden spurt in demand after emergencies such as flood and drought.
The government also anticipates a rise in demand for rice and wheat after lawmakers approve a food security bill, likely to provide more subsidised grains to the poor. The nation's Feb 1 wheat stocks were 19.4 million tonnes, well in excess of a target of 8.2 million tonnes, while its rice inventory rose to 27.8 million tonnes against a target of 11.8 million, government sources say.
Analysts and economists say India, the world's second-biggest rice and wheat producer, needs high-yielding crops to overcome an expected output loss due to shrinking acreage of farm land.
Prime Minister Manmohan Singh's government has been struggling to keep a lid on high food prices, largely triggered by a spike in the prices of vegetables and dairy products. Poor storage and transportation facilities have significantly contributed to price rises.
"There are signs of food and fuel price increases spilling over into general inflation," the survey said. Unseasonal rains in late 2010 wrecked vegetable supplies and pushed the food price index to a one-year high in December.
In India, the rate of food inflation is among the highest in Asia. Despite projections that food inflation would fall to single digits, it rose 11.49 percent in mid-February. On Thursday, Singh told parliament that his government would take further steps to curb prices, indicating some measures to be announced in the budget to rein in high prices.
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